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Shavell, Steven

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Shavell

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Steven

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Shavell, Steven
Author's Publications: search.filters.isAuthorOfPublication.8bd890ca-432c-4812-81e9-ac7922a5583b

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Now showing 1 - 10 of 33
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    Economic Analysis of Threats and Their Illegality: Blackmail, Extortion, and Robbery
    (University of Pennsylvania, 1993) Shavell, Steven
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    When Is It Socially Desirable For An Individual To Comply With The Law?
    (University of Chicago Law School, 2012) Shavell, Steven
    When would an individual expect that adherence to the law would advance the social good? This time-honored question is not only of theoretical interest; it also holds practical importance to the degree that individuals wish to further social well-being. In the stylized model on which I focus, an individual’s knowledge of factors relevant to social welfare is inferior to that of lawmakers in some respects and is superior in others. Thus, in assessing whether obeying a legal rule would promote social welfare, an individual must take into rational account not only that the rule will impound certain superior information of lawmakers, but also that the rule will often fail to reflect his or her private information. A second issue that an individual must consider in deciding whether following the law would be socially desirable is a compliance externality: the potential influence of the witnessing of his or her compliance behavior on the compliance behavior of observers. The conclusions from the model of socially desirable conformance to the law are interpreted, including their implications for the moral obligation to obey the law.
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    A Simple Model of Optimal Deterrence and Incapacitation
    (Elsevier, 2015) Shavell, Steven
    The deterrence of crime and its reduction through incapacitation are studied in a simple multiperiod model of crime and law enforcement. Optimal imprisonment sanctions and the optimal probability of sanctions are determined. A point of emphasis is that the incapacitation of individuals is often socially desirable even when they are potentially deterrable. The reason is that successful deterrence may require a relatively high probability of sanctions and thus a relatively high enforcement expense. In contrast, incapacitation may yield benefits no matter how low the probability of sanctions is — implying that incapacitation may be superior to deterrence.
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    A General Rationale for a Governmental Role in the Relief of Large Risks
    (2014) Shavell, Steven
    The government often provides relief against large risks, such as disasters. A simple, general rationale for this role of government is considered here that applies even when private contracting to share risks is not subject to market imperfections. Specifically, the optimal private sharing of large risks will not result in complete coverage against them. Hence, when such risks eventuate, the marginal utility to individuals of government relief may exceed the marginal value of public goods. Consequently, social welfare may be raised if the government reduces public goods expenditures and directs these freed resources toward individuals who have suffered losses.
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    A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation
    (University of Chicago Press, 2012) Shavell, Steven
    Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this advantage suggests that the examination of behavior under the negligence rule should tend to be more detailed than under regulation (as it is).
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    Costly litigation and optimal damages
    (Elsevier BV, 2014) Polinsky, A. Mitchell; Shavell, Steven
    A basic principle of law is that damages paid by a liable party should equal the harm caused by that party. However, this principle is not correct when account is taken of litigation costs, because they too are part of the social costs associated with an injury. In this article we examine the influence of litigation costs on the optimal level of damages, assuming that litigation costs rise with the level of damages.
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    Risk Aversion and the Desirability of Attenuated Legal Change
    (Oxford University Press, 2014) Shavell, Steven
    This article develops two points. First, insurance against the risk of legal change is largely unavailable, primarily because of the correlated nature of the losses that legal change generates. Second, given the absence of insurance against legal change, it is generally desirable for legal change to be attenuated. Specifically, in a model of uncertainty about two different types of legal change—in regulatory standards, and in payments for harm caused—it is demonstrated that the optimal new regulatory standard is less than the conventionally efficient standard, and that the optimal new payment for harm is less than the harm.
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    A Simple Model of Optimal Deterrence and Incapacitation
    (Harvard John M. Olin Center for Law, Economics, and Business, 2014) Shavell, Steven
    The deterrence of crime and its reduction through incapacitation are studied in a simple multiperiod model of crime and law enforcement. Optimal imprisonment sanctions and the optimal probability of sanctions are determined. A point of emphasis is that the incapacitation of individuals is often socially desirable even when they are potentially deterrable. The reason is that successful deterrence may require a relatively high probability of sanctions and thus a relatively high enforcement expense. In contrast, incapacitation may yield benefits no matter how low the probability of sanctions is—implying that incapacitation may be superior to deterrence.
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    A Skeptical Attitude About Product Liability is Justified: A Reply to Professors Goldberg and Zipursky
    (Harvard University, Harvard Law School, 2010) Polinsky, A. Mitchell; Shavell, Steven
    In The Uneasy Case for Product Liability, we maintained that the benefits of product liability are likely to be less than its costs for many products, especially widely sold ones. Our article was intended to alter the dominant view held by the judiciary and commentators that product liability has a clear justification on grounds of public policy. We argued instead that a skeptical attitude toward product liability should be adopted. Professors John Goldberg and Benjamin Zipursky strongly criticize our article in The Easy Case for Products Liability Law: A Response to Professors Polinsky and Shavell. To a significant extent, however, they attack a straw man, for they impute to us a radical thesis – that product liability should be eliminated for all widely sold products – that we manifestly did not advance. In fact, we argued that whether product liability is undesirable depends on the particular product. Goldberg and Zipursky also ascribe to us other opinions that exaggerate what we said in our article – notably, they state that we believe that product liability has no beneficial effect on product safety for widely sold products. It is not surprising, therefore, that they are unable to support these mischaracterizations with citations to statements in our article. The major claim that Goldberg and Zipursky develop is that our benefit-cost analysis fails to demonstrate that the case for product liability is uneasy. In our view, their critique is deficient on multiple accounts, including that it contains numerous distortions and errors, and hence does not alter our original conclusion.
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    The Uneasy Case for Product Liability
    (Harvard University, Harvard Law School, 2013-07-30) Polinsky, A. Mitchell; Shavell, Steven
    In this Article we compare the benefits of product liability to its costs and conclude that the case for product liability is weak for a wide range of products. One benefit of product liability is that it can induce firms to improve product safety. Even in the absence of product liability, however, firms are often motivated by market forces to enhance product safety because their sales may fall if their products harm consumers. Moreover, products must frequently conform to safety regulations. Consequently, product liability might not be expected to exert a significant additional influence on product safety — and empirical studies of several widely sold products fail to find an effect of product liability on the frequency of product accidents. A second benefit of product liability is that it can improve consumer purchase decisions by causing product prices to increase to reflect product risks. But because of litigation costs and other factors, product liability may raise prices excessively and undesirably chill purchases. A third benefit of product liability is that it compensates victims of product-related accidents for their losses. Yet this benefit is only partial, for accident victims are frequently compensated by insurers for some or all of their losses. Furthermore, the payment of compensation for pain and suffering actually reduces the welfare of individuals because it effectively forces them to purchase insurance for a type of loss for which they ordinarily do not wish to be covered. Offsetting the potential benefits of product liability are its costs, which are great. Notably, the transfer of a dollar to a victim of a product accident via the liability system requires more than a dollar on average in legal expenses. Given the limited benefits and the high costs of product liability, we come to the judgment that its use is often unwarranted. This is especially likely for products for which market forces and regulation are relatively strong, which includes many widely sold products. On the other hand, the use of product liability may be desirable for products for which these factors are weak. Our generally skeptical assessment of product liability for products for which market forces and regulation are strong is in tension with the broad social endorsement of such liability.